Can a Company Based in Canada Use Eminent Domain in Oklahoma?

Tuesday, May 10th 2011, 12:23 pm
By: News 9

By Amy Lester, Oklahoma Impact Team

OKLAHOMA CITY -- On one side is the company, TransCanada. On the other, are landowners fighting to keep a pipeline off their property.

"It is ours. They didn't work and pay for this land. They don't have a right to bully their way across here and take whatever they want," said Sue Kelso, whose family is facing eminent domain court proceedings.

Kelso and her siblings don't want TransCanada's Keystone XL pipeline to go through their property. The pipeline expands one that currently ends in Cushing and takes it south to refineries in the Gulf Coast. It will travel through eight counties in Oklahoma. Kelso's family has other natural gas pipelines under the farm. But, she says this company was different.

"The very first meeting we had, we were told we would take it or they would condemn our property anyway," Kelso said.

Plus, Kelso worries about the safety of the line, possible contamination of the water supply, the environment and the type of oil that will flow through it.

Friends of the Earth environmental group voices concerns

The crude oil will mostly come from Alberta oil sands. According to the US Department of State, "The material extracted from the oil sands is typically a very viscous material called bitumen."  In addition to the oil sands oil, the pipeline will carry 25 percent from US producers.

Read about bitumen

Kelso's family isn't the only one fighting the pipeline.

"I'm upset, naturally," said Jack Landrum, who is also in an eminent domain battle with TransCanada. "I own the land, they want it, they do not have a right to it."

Landrum said the pipeline will go right through his cattle breeding operation. Landrum stopped doing his most sensitive embryo work when the company first contacted him two years ago. He put the brakes on it because he has to plan a year in advance. He said he can't do that with the uncertainty of the pipeline. He said as a result he's lost a third of his income.

"What I think of them is not very high. On a scale from 1 to 10, they're probably minus 1," Landrum said.

Landrum and Kelso both said the company didn't truly negotiate with them. Now they hope the court can stop TransCanada from putting the pipeline through their property.

"It's nothing but a profit entity for a group of people that are foreign to our operation. We don't need it," Landrum said.

But a project representative said the pipeline will help the public. That's why TransCanada believes it can use eminent domain.

"That's a legal tool of last resort. Frankly, we'd preferred not to do that," said Jim Prescott, Project Representative. "We've negotiated voluntary easements with more than 90 percent of the landowners in Oklahoma that we do business with."

The company also disputes everything the landowners say. Prescott pointed out they will compensate the landowners and the landowners still retain ownership and the title to their land. He also said construction of the pipeline will create hundreds of jobs, along Oklahoma's 200 mile route, over nearly one years time. Workers will buy from local suppliers and this will pump $1.2 billion into the Oklahoma economy.

Read economic impact report

Many Oklahoma oil producers agree that this is a good thing for Oklahoma. Right now, there's an oversupply of oil in Cushing. Millions of barrels of oil are sitting in storage tanks there, and there's no easy way out for oil from Cushing to the Gulf Coast refineries.

"We've got a real problem in Cushing with oversupply of crude oil. We really need to get a pipeline going from Cushing down to Port Arthur, Texas," said Mike McDonald, President of Triad Energy.

This glut in Cushing means local producers receive $10 less per barrel of oil, when compared to other producers in the world. McDonald said it's only fair for local producers to receive the world price, not a discounted price.

See price comparison between WTI (OK oil) and Brent (world oil)

"When we get that money, we take it and spend it and drill more wells. So, it just creates additional economic activity in the state of Oklahoma and it's just a compounding effect," McDonald said.

Nearly all of our Congressional delegation and Governor Fallin have also sent letters supporting the project to Secretary of State Hillary Clinton.

Read letter here

She's the one deciding whether the company receives a presidential permit to build the pipeline. Anyone can also send a comment to her office, to sound off on this proposed project.

Submit a comment to Secretary of State Hillary Clinton

Some landowners said the company shouldn't push for their land until it has the appropriate permit. In the meantime, they'll keep fighting, in court.

Learn more about Transcend and the Keystone Pipeline

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